Near governance approves plan to slow NEAR token issuance by 0.9 percentage points
Near votes to limit new token supply
Near Protocol's community has approved a proposal to slow the rate at which new NEAR tokens enter circulation. The network's governance body, called the House of Stake, said the measure would lower the maximum annual token issuance from 2.5% to 1.6% over a 24-month period.
Despite the approval, the NEAR token fell about 7% on Tuesday. It traded at $3.82 as of 11:06 am UTC, extending a roughly 13% decline over the week, according to CoinMarketCap.
Token issuance is the process of creating new tokens and adding them to circulation. For many blockchains, a share of newly created tokens goes to reward people who help secure the network through staking.
What the vote and numbers show
- The proposal, labeled HSP-029, received support from 99.9% of the participating voting power.
- About 3.28 million vote-escrowed NEAR, or veNEAR, tokens were cast in favor, according to the NEAR House of Stake governance platform.
- Over two years, the cut would prevent around 11.8 million NEAR from being issued, worth roughly $45 million at the token's current price.
- Over six years, total issuance would fall by an estimated 66.1 million NEAR.
- Projected gross staking yields are expected to decline from 5.2% to 3.3% by the end of the 24-month period.
Steps still needed before the cut takes effect
The vote is not yet final. The proposal remains subject to a 14-day veto window held by the Security Council. If the council does not block it, the measure will be ratified and followed by a 90-day grace period before the issuance reduction begins.
Implementation also requires validators to adopt the necessary technical upgrade. Validators are the participants in a proof-of-stake network that process transactions and secure the blockchain.
Why the decision is being watched
The change would reduce long-term token dilution, which happens when the supply of a token grows faster than demand and can put downward pressure on its value. At the same time, the proposal explicitly lowers the expected rewards for stakers, moving from 5.2% to 3.3% over the two-year transition.
The immediate market reaction was a price drop, with NEAR also extending its weekly loss to roughly 13%.
What is confirmed
The sources confirm that the vote passed with 99.9% support of participating voting power, that about 3.28 million veNEAR voted yes, and that the issuance path moves from 2.5% to 1.6% over 24 months. They also confirm the 11.8 million NEAR and 66.1 million NEAR issuance reductions, the staking yield change from 5.2% to 3.3%, the 14-day veto window, the 90-day grace period, and the requirement for a validator upgrade.
What is still unclear
It is not yet confirmed whether the Security Council will exercise its veto. The exact date when the issuance reduction would begin depends on both the veto outcome and the completion of the validator upgrade.
Sources
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